I took the Yen Short Sale I mentioned in here last night today. This market just free fell on the bogus retail sales report, down 200 points on the day. I was waving to the crowd at that point. However, as the market has a way of doing, we got a significant rebound from there closing in the middle of the range making this look a little marginal now. These large range days are always tough, and we have seen so many this year. The market punches itself it in very short spurts nowadays. Trades I go into intending to hold if they work out for 3 to 10 days, move the amount desired at times in hours.
This is the world we are living in now. Information is disseminated faster than ever before, and for the moment until Congress stops it with the trader tax they are contemplating, this is how things are going to be. You either have to keep stops further back, or take quick profits. If they pass the trader tax, the markets will essentially be ruined, and all this will go away. The brokerage firms will also leave the US taking ungodly amounts of tax revenue for the government with them. As annoyed as Congress has to be with trading because it allows those who can do it to not be dependent upon the government at all, trading performs a vital liquidity function.
These morons do not understand that if they do what that communist Pelosi seems to be endorsing, the markets will be completely illiquid. Average Joe who holds Microsoft stock for months or years like the government says you should, will take a nice hit when they sell. Why? With no market makers filling orders, he will be reliant upon another person like him placing the same order from the opposite side. It could take a couple of dollars of decline in price before that happens, resulting in a nice little loss for Average Joe. As repulsive as traders obviously are to these people, they perform a critical liquidity function. Since you have people at every .01 buying and selling now for small gains, it allows the average people who do not do this, to get good fills on their orders.
They want to eliminate this. If I was not living through these times I would not believe they are happening. Obviously, I and every other trader will leave the US if this gets passed and move to a place where it is not happening.
As to this Yen trade, I have to study this over the weekend, but since we stopped right on weekly support it is likely I will take profits Sunday night in this one. I think this bounce indicates we are not yet ready to go here yet, but I could change my mind after looking at this. I don't like very big short term moves like this getting reversed the day they happen or the day after, it feels like a trap to me at the moment.
Even though I still am of the mindset that the PPT and everyone else involved in this bubble build here will do everything in their power to keep things strong through year end, there is a sell signal for me on Monday in the S&P if we break down below todays low. I will take this trade if it occurs, but will not likely go for a big target, since I think the powers that be will only let it go so far if they let it go at all. We are now churning in a zone where now a break could hit a 20 day low which might attract fund selling. That might be very interesting to see who blinks first if we get there before years end.
Notice the old textbook Head and Shoulders pattern where the red arrows are that is setting up. We also have a good amount of divergence in the Pro Go Oscillator. A short entry could be done at the line drawn on the chart, and I will likely be a player there.
Have a great weekend I will probably post some new things over the weekend!